Amendment of the Corporate Income Tax Law to remove obstacles and difficulties for enterprises, facilitating taxpayers.
What is the amendment of the Corporate Income Tax Law aimed at addressing obstacles and difficulties for businesses and facilitating taxpayers?
The Ministry of Finance has just completed a draft proposal to the Government of Vietnam, requesting the construction of a project to amend the Corporate Income Tax Law, revising certain contents of the Corporate Income Tax Law 2008 and the Amended Corporate Income Tax Law 2013.
Four main policy groups are mentioned in this amendment, particularly the policy groups aimed at addressing business production difficulties and facilitating taxpayers:
First, expanding the tax base according to the Communist Party and the State's policies and in line with international practices through adjustments to the scope, objects, and review of exemption and reduction policies;
Second, amending and supplementing the contents of the Corporate Income Tax Law to resolve inadequacies, address difficulties for business production, reduce administrative procedures, and facilitate taxpayers;
Third, amending and supplementing the contents to ensure the uniformity of the legal system;
Fourth, amending and supplementing the contents to ensure the goals of international economic integration, in line with development trends.
What is the amendment of the Corporate Income Tax Law aimed at addressing obstacles and difficulties for businesses and facilitating taxpayers?
What solutions are proposed to address obstacles and difficulties for businesses and facilitate taxpayers?
In the Draft Proposal on the Amended Corporate Income Tax Law, the policies amend and supplement the contents of the Corporate Income Tax Law to resolve inadequacies, address difficulties for business production, reduce administrative procedures, and facilitate taxpayers through several solutions:
(1) Researching amendments and supplements to regulations on tax-exempt income for Corporate Income Tax.
(2) Researching amendments and supplements on the deductible and non-deductible expenses when determining taxable income to resolve obstacles and facilitate implementation.
(3) Researching amendments to the Corporate Income Tax rate for oil and gas exploration and production activities in Vietnam.
(4) Adding regulations on tax calculation methods, specifically considering detailed regulations on appropriate tax rates for enterprises applying micro accounting policies to encourage and facilitate the establishment and operation of micro-enterprises.
(5) Researching amendments and supplements to regulations on conditions and principles for applying tax incentives for the agriculture, forestry, fishery, and salt industry; on the principle of calculating the incentive period for high-tech enterprises, high-tech agricultural enterprises, science and technology enterprises, and for high-tech application projects, support industrial product production projects, and corresponding transitional incentive regulations.
(6) Researching amendments to the interest rate regulations for the tax on the portion set aside for the Science and Technology Development Fund that businesses have not fully utilized to match current practices.
Will regulations on tax-exempt income for Corporate Income Tax be amended and supplemented?
This is one of the prominent proposals in the Draft Proposal on the Amended Corporate Income Tax Law. To be specific:
In the Proposal, the Ministry of Finance has opined that Article 4 of the Corporate Income Tax Law 2008 (supplemented by Clause 3, Article 1 of the Amended Corporate Income Tax Law 2013 and Clause 2, Article 1 of the Law amending Tax Laws 2014) specifies 11 tax-exempt income items, mainly related to incomes from:
- Agriculture, forestry, and fishery in investment incentive areas;
- Incomes from products under scientific research and technology development contracts, products in the trial production stage;
- Incomes of enterprises using at least 30% of laborers who are disabled, former drug addicts, or HIV/AIDS-infected persons;
- Incomes from vocational activities exclusively for ethnic minorities, the disabled, children with special difficulties, and social evils subjects;
- Incomes from joint ventures and partnerships that have paid corporate income tax;
- Incomes from the transfer of emission reduction credits;
- Incomes from performing state-assigned tasks of non-profit state financial funds;
- Undistributed incomes of private investment institutions in education, training, healthcare, and other private investment fields to reinvest in the same institution under specialized laws.
Basically, these regulations align with practical implementation over time, encouraging enterprises to invest in certain preferential fields and sectors according to the Communist Party and the State's orientation. However, new fields and sectors have emerged, whose incomes need to be considered for tax exemption to receive higher incentives, or some fields require clear criteria to ensure transparency in implementation.
Given these issues, the Ministry of Finance proposes researching amendments and supplements to regulations on tax-exempt and reduced income:
- Adding tax exemption regulations for:
Support from the state budget; income from providing basic public services and essential using the state budget; income from providing public services using the state budget in areas with extreme socio-economic difficulties; income from interest on green bonds and income from the transfer of green bonds; compensation income from the State; interest income from deposits, interest from Vietnam Government bonds, Treasury bills of non-profit state financial funds and other non-profit state funds.
- Adding regulations on tax reduction equivalent to the income portion from providing public services using the state budget in areas with socio-economic difficulties.
- Adding clear criteria for undistributed incomes of private investment institutions currently tax-exempt.
More details can be found in the Draft Proposal on the Amended Corporate Income Tax Law here: download
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